Auto industry goes south under capitalist globalization

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Understanding globalization, the main trend of capitalism at the beginning of the 21st century, is critical because of the many ways that it is undermining the lives and communities of working people in North America and around the world. ... Although tackling the issue of globalization is a challenging task, it is not as daunting as it might at first appear. Two salient facts about global production clarify the issue:

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Vogel dispels the myth that the role of labour in the latest production approaches under capitalism has diminished. He points out that, in fact, "labor costs continue to be the primary factor in determining the profit rate in most industries". There is a good introduction to the use of the notions of fixed costs and labour costs. Says Vogel:

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[S]etting up runaway plants and offshoring production in order to exploit cheap labor markets is a primary means of reducing aggregate labor costs and securing higher profits for the owners of capital.

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The second point from Vogel is that "value is added to a commodity at each stage of a production chain, no matter where the operation takes place, allowing capitalism to suppress the aggregate labor costs of commodities by developing global production chains that exploit the cheapest labor available regardless of international boundaries."

Capitalism's demand for cheap labour is insatiable.

Vogel draws attention to the declining employment in the auto sector in North American countries like Canada and the U.S., in both manufacturing cars and in parts as well, and outlines the migration of the auto industry to the south for cheaper workers who can be even more mercilessly exploited than their Canadian and American couterparts.

There is an extensive discussion of the details of the tiered labour market, disparity of wages, and so on. Says Vogel:

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When the skewed array of tiered hourly wages in chart 3 is considered in light of the labor cost/profit correlation illustrated in chart 1, the heart of the globalization of the North American auto industry is laid bare for all to see.

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Vogel has a grim forecast.

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Globalization in North America has not been restricted to the auto industry. Similar global production chains have been established in all branches of manufacturing from home appliances and medical equipment to hardware and clothing, and the impact on labor in these industries has been comparable. The question of what, if anything, can be done about globalization is a sobering one. ....

The current global labor situation is problematic. Workers around the world are pitted against one another in a tiered international labor market controlled by big capital and underwritten by the most powerful states in history. Isolated by the absence of an organized left at both the national and international levels, working people are facing an increasingly precarious future. Without effective political action, living and working conditions for the majority of the citizens in North America and the world are going get a lot worse before they get any better.

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